Understanding and Improving Your Credit Score in .NET framework

Painting QR Code in .NET framework Understanding and Improving Your Credit Score

5

Understanding the importance of credit scores and credit reports Looking at what factors determine your FICO score and how to improve it Boosting your credit score to get better loan terms

When you apply for a loan, lenders try to determine your credit risk level If they decide to loan you money, what are the odds that you ll pay them back on time To understand your credit risk, most lenders look at your credit score Your score influences the credit that s available to you and the terms of any mortgage that lenders offer you Most lenders also use a number of other facts to make credit decisions They usually look at the amount of debt you can reasonably handle given your income, your employment history, and your credit history Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you even if your score is low, or decline your request for credit even if your score is high But your chances for getting approved at the best possible loan terms improve when you have a good score Understanding your credit score can help you manage your credit health By knowing how lenders evaluate your credit risk, you can take action to lower your credit risk and thus raise your score over time A better score may mean better loan options for you

Follow the tips in this chapter to manage your credit score efficiently Improving your score can help you: Get better credit offers Lower your interest rates Speed credit approvals

You ve probably heard about credit reports and realize that they can make or break your application for a loan However, these reports are mysterious to most of us because we don t know what goes into a credit report, nor do we understand what we can do to improve our credit score Wonder no more

Credit reports tell a lender how well you manage your finances Your report details your credit history as it has been reported to the credit-reporting agency by lenders who ve extended credit to you Your credit report lists What types of credit you use The length of time your accounts have been open Whether you ve paid your bills on time It tells lenders how much credit you ve used and whether you re seeking new sources of credit It gives lenders a broader view of your credit history than one bank s own customer records (unless all your previous credit has been drawn from that one bank)

Although each credit-reporting agency formats and reports information differently, all credit reports contain basically the same kinds of information: Identifying information: Your name, address, Social Security number, date of birth, and employment information are used to identify you These factors aren t used to calculate your score, however Updates to this information come from information you supply to lenders

Trade lines: These are your credit accounts Lenders report each account you ve established with them They report the type of account (credit card, auto loan, mortgage, and so on), the date you opened the account, your credit limit or loan amount, the account balance, your payment history, and when you closed the account Inquiries: When you apply for a loan, you authorize your lender to ask for a copy of your credit report This is how inquiries appear on your credit report The inquiries section contains a list of everyone who accessed your credit report within the past two years The report you see lists both voluntary inquiries, spurred by your own requests for credit, and involuntary inquiries, such as when lenders order your report so as to make you a preapproved credit offer in the mail Public record and collection items: Credit-reporting agencies also collect public record information from state and county courts and information on overdue debt from collection agencies Public record information includes bankruptcies, foreclosures, suits, wage attachments, liens, and judgments Along with the credit report, lenders can buy a credit score based on the information in the report